As cannabis producers struggle to create meaningful relationships between brands and consumers, accessories may offer a solution, according to one executive.
Following a panel at the Lift & Co. (TSXV:LIFT) Cannabis Business Conference (LCBC) in Vancouver, the Investing News Network talked with Nick Kuzyk, chief strategy officer and senior vice president of capital markets for High Tide (CSE:HITI), about the power accessories will have in creating brand awareness for massive licensed producers (LPs).
“The accessory space has always been legal, but now it’s being embraced as an opportunity for branding and marketing purposes,” Kuzyk said.
High Tide, a retail-focused cannabis company with stores in Alberta, also has a division working on the development of cannabis accessories. In December 2018, High Tide obtained a C$10-million investment from Canadian firm Aurora Cannabis (NYSE:ACB,TSX:ACB).
Kuzyk said Aurora first approached High Tide with specific ideas on items; after the company completed those, more LPs with similar pursuits have been in contact. He added that thanks to the “increasing of the spotlight on the cannabis industry,” there is larger demand for the accessories and tools needed to consume these new products.
In Canada, heavy restrictions on promotion and branding from Health Canada have created roadblocks for LPs looking to popularize product brands following the legalization of cannabis on October 17.
Nick Pateras, vice president of strategy at Lift, told LCBC attendees that data from Lift indicates that consumers are not getting attached to brands from official producers as much as strains.
Pateras said that a recent survey shows 64 percent of consumers named a strain rather than a brand or company when asked about legal products.
Commenting on the Aurora investment, Raj Grover, president and CEO of High Tide, said it was a vote of confidence from the company’s fellow Alberta-based enterprise. Grover indicated that the proceeds will be used to fund retail acquisitions, store upgrades and further strategic acquisitions.
“The LPs have recognized our ability to produce products that are not related to the plant,” Kuzyk told INN. High Tide debuted publicly on the Canadian Securities Exchange on December 17.
According to Kuzyk, High Tide, which was launched originally in 2009, secured revenues of C$10 million in 2018 and its expected run-rate revenue will be close to C$25 million.
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Written by: Bryan Mc Govern
Source: Investing News